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Collaborative Relationships in Procurement

In the age of globalisation, where business is conducted across borders, cultures and sectors, effective collaboration can help companies to make the most of internal and external alliances to achieve... greater business success (Prof. Richard Wilding, 2006)

Information about Collaborative Relationships in Procurement

In purchasing and supply management literature collaborative relationships are contrasted with 'adversarial' or 'arm's length' relationships, also referred to as 'opportunistic relationships' (Cousins and Spekman, 2003). Adversarial/opportunistic relationships are characterised by an arm's length communication approach and adversarial (competitive) attitudes, focus on price reductions, emphasis on individual transactions and reluctance to share information (Saunders, 1997; Cousins and Spekman, 2003). These strategies can achieve price reductions in the short term. In the long-term, however, they may not be sustainable since most value-adding strategies (e.g. innovation) can hardly be achieved if the supplier focuses only on price.

Collaborative relationships, on the other hand, are characterised by shared goals, supplier development, and integration of business processes. They allow collaborating firms to realise benefits which they could otherwise not achieve (Cousins and Spekman, 2003). In today's turbulent and uncertain markets there are numerous reasons, as well as enablers, for pursuing collaborative relationships, eg. globalisation, internationalisation, and rapidly advancing technologies (CIPS: P&SM; collaboration between organisations).

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